As part of my work at the church I do volunteer financial counseling. A while back I met with an individual who had concerns about their finances – they just couldn’t get all their bills paid, had some credit card debt, and wanted me to look over their finances. So I went over to their place and we took a look at what was going on in their financial life.
One of the first things that I did was try to get an understanding of their monthly income and expenses. This way I could see quickly where they were financially – did they have enough money to meet expenses or were they digging themselves into a financial hole? Basically it is just putting down on paper what their “budget” is.
When I finished calculating their monthly income and expenses, I had to tell them that before taking money out for groceries (they weren’t sure how much they spent on that) they were already spending more per month than they were earning per month!
So I went over their spending and found a few areas they could trim. One of them was their T.V. expenses. They were spending over $100 a month on satellite and accessories. So I suggested that they cut back. They just looked at me. So I repeated that they didn’t have any money in their budget for groceries so they had to choose between eating or watching T.V. Again, no response. I wrapped up the meeting as best as I could and thanked them for their time and willingness to have me come over.
This person was asking me for help. They knew that their finances were in trouble. But when it came down to choices, they were not willing to change their lifestyle, even if that meant no food! Financial choices are hard to make.
Budgeting is a simple concept, but it is very hard to do. We (and I include myself) do not like to deny ourselves. We want things, and we want it now, sometimes regardless of the price we will pay later. Living on a budget is not for sissy’s. It is hard. But the rewards are worth it.
P.S. The actual story above is true, but the events & situations have been modified to protect the identity of everyone involved.
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This post got me thinking about my group of friends and how much change I have seen in them all over the last year as the economy tanked. For instance, I have a friend who recently mentioned that he has paid his back taxes, set up a budget, and committed to quit spending money on Starbucks several times a week. He said that last year he spent over $600 on coffee! This is another ‘TV or food’ scenario. Sadly, I think there are still many people, like this couple, who intend to let their debt swallow them whole.
PS- I love your blog, keep us the great work.
It is hard to see so many people allow themselves to sink. I’m glad that you have seen some change in your group of friends. Thanks for commenting and your kind words.